President Donald Trump's decision this week to extend the country's social distancing guidelines until April 30 was based partly on data from statistical models that predict the peaks and plateaus of the coronavirus outbreak in the U.S.
Models like these are also useful in forecasting when the economy will get back on track, according to a presenter at a Design-Build Institute of America webinar this week. Keith Prather, market intelligence expert for Olathe, Kansas-based business management consulting firm Pioneer IQ, developed the Fear and Recovery Curve model to help indicate when the crisis will top out and when it will begin to recede.
He told attendees that the U.S. economy will get back to normal sooner rather than later and downplayed some analysts’ views that the outbreak could keep businesses sidelined until early next year.
Based on one of the models that President Trump’s public health experts use — the University of Washington’s Institute for Health Metrics and Evaluation — Prather’s analysis looks at the suspected rate of fear among all parts of American society, from hourly workers and corporate executives to government officials and economic experts in order to get a reading on when things will rebound.
The Fear Curve also relies on information from state and national governments, hospital groups and the World Health Organization and is heavily reliant on a scenario that includes the development of a successful COVID-19 treatment program within the next few weeks. These might include a combination of medications such as malaria drugs or antibiotics that are currently being tested.
By including the idea that a treatment will soon start to reduce the COVID-19 mortality rate in the U.S., Prather said his analysis shows that parts of the country could start getting back to work in just over a month from now. His forecast is predicated on the idea that once Americans' worries over the risk of dying from the coronavirus dissipates due to treatment options, society can return to normal.
“That’s where the fear starts to come down and optimism builds,” he said.
Even so, Prather said, he believes the crisis is still “in the third inning” with several hurdles on the horizon until it peaks, most notably shortages of equipment and staff in hospitals in hot zones like New York City, Chicago and Miami.
“That creates additional fear,” he said. “We’ve still probably got at least two more weeks before we can call it a crisis peak.”
Using the Fear Curve data, Prather predicted that the third week of April will see a decline in deaths and a loosening of restrictions in some jurisdictions including some reopening of construction sites. Things will get back to normal across the country by mid-May, he said, which is also when the CDC recommendation for halting gatherings of 50 or more people is due to expire.
Based on the data, Prather and co-presenter DeWayne Ables, senior strategist for Pioneer IQ, had several predictions for how the virus is affecting the construction industry now and into the future.
While many areas of the country have been stricken by the outbreak, others have had very little ramifications. This means that contractors should track infections rates in the areas where they work to be ready for a spike in projects. The Johns Hopkins University of Medicine map offers county-by-county information updated daily.
“We are strongly suggesting companies dig into data to understand how to tailor the Fear Curve for their geographic market and for the industries they’ve been serving,” said Ables. “You’ve got to start to make some decisions for what you believe is a general timeline for your markets.”
In addition, the coronavirus has led to major supply chain disruptions, especially of goods from China, and Prather said he thinks American businesses will be hesitant to resume orders from this part of the world.
“How we source projects has a lot of weaknesses,” he said. “We believe that going forward there will be a lot of reshoring back in the U.S. where we’ll see an increase in our manufacturing ability here as well as heading into Mexico.”
This in turn will create a surge of new manufacturing- and supply chain-related construction projects such as factories and warehouses, he added.
In addition, pent-up demand from the current construction shutdowns will lead to a “construction tsunami” beginning in the third quarter, driven by historically low interest rates and a “tremendous amount of liquidity being pumped back into the market,” Prather said.
Ables noted that the design-build delivery method is ideal for a fast-moving situation such as the coronavirus crisis because it is centered on a team approach to solving problems that allows for flexibility and fast decision making around challenges.
This ability to quickly pivot will allow design build teams to seize opportunities as they arise, he said.
“The design build process was made for this,” he said. “No one is operating alone, everyone has several different team mates they can pull from.”